India review its FDI policy by permitting investments from Pakistan


The Government of India has reviewed the FDI policy towards the Pakistan and Bangladesh, as contained in paragraph 3.1.1 of the circular ibid and decided to permit a citizen of Pakistan or an entity incorporated in Pakistan to make investments in India, under the Government route, in sectors/activities other than defence, space and atomic energy.  A non-resident entity can invest in India, subject to the FDI Policy. A citizen of Bangladesh or an entity incorporated in Bangladesh can invest only under the Government route. A citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the Government route, in sectors/activities other than defence, space and atomic energy. 

This is a long time demand from both the countries to enhance the investment opportunities, as India is the second largest market in the world and its burgeoning middle income groups have the great potentialities of business across the border. Hopefully same would be reciprocated by Pakistan to open its economy for Indian investors. 

Following India's move, Pakistan's central bank has allowed two banks to open branches in India as part of efforts to normalise economic and trade relations between the two countries. State Bank of Pakistan (SBP) Governor Yasin Anwar told the media that the National Bank of Pakistan and the United Bank Ltd had been given the "green signal" to operate in India.

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